prancingbull.com

Host Hotels and Resorts is poised for a decent run upwards over the next few months I believe. Between the months of May and July, the stock dropped from a high of $18.76 all the way down to $11.14, a drop of 40.6%. Ouch! Ever since that low, the stock has risen back up to it’s current price of $14.27. This is a gain of 28.1%. I think that the stock is on it’s way back up to at least $18/share before the end of the year. This would give it a gain of 26.1% from today’s price.

I have come up with this price target purely by doing a quick technical analysis of the stock’s chart. Take a look at the chart below to see how it has fared over the past three months.

Based on my calculations, the slope of this positive sloping trendline is about +$1.76/month. Remember though that this is a fairly arbitrary line that was chosen based upon my opinion of the chart. I believe that this line does represent a fairly accurate view of how the stock has moved over the past few months. Even more encouraging is that it has continued to fare well, even as the market has been very shaky over the past few months.

Based on a slope of +$1.76/month, I believe that the stock should be well situated in the $18s by November.

One should take note though of a strong patch of resistance between $17.25 and $17.50. As you can see in the chart below, the stock struggled to make it through the elusive $17.50 mark as it traded in a narrow band between $16.00 and $17.50 for about four months between the beginning of January through the end of April.

You will notice at the end of May HST ended its’ short lived one-month above $17.50. As soon as it dropped below this mark, the stock tanked and dropped all the way down to $11.14/share in a little over a month.

I think that the stock will have an easy run up to the $17.50 range and then stagnate for a little while. I would either sell at this point or put a trailing stop loss order on the stock with a roughly $1.50 trail to lock in your profits.

If you get in before 9/30/2008, you will also be eligible for the $.20/share dividend. That puts the current yield at abot 5.6%. That beats any certificate or money market account these days